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ACM upholds violation by municipality of Veenendaal in parking garages case

August 30th, 2019: The District Court of Rotterdam has ruled on appeal in this case. For the complete text of that ruling (in Dutch), please refer to this page.

The Netherlands Authority for Consumers and Markets (ACM) upholds its previous decision regarding a case involving the Dutch municipality of Veenendaal in the Dutch province of Utrecht. In that decision, ACM established that, for years, the municipality had failed to include all costs of its own parking garages and parking lots in their parking rates. As such, the municipality competed unfairly with nearby parking garages operated by commercial parking provider Q-Park, thereby violating the Dutch Competition Act (more specifically, the law on competitive neutrality, the Dutch Act on Government and Free Markets). Furthermore, ACM has rescinded the order subject to periodic penalty payments imposed on the municipality of Veenendaal. In a January 2018 resolution, Veenendaal invoked an exemption clause in the Dutch Competition Act. Whether that resolution will hold up in court remains to be seen.

In September 2017, ACM established that the municipality had violated the Dutch Competition Act, and, in November, imposed an order subject to periodic penalty payments for said violation. With that order, ACM wanted the municipality to start including all operating costs of its parking garages in the parking rates. Veenendaal subsequently brought ACM’s decisions before the court. However, the court in interlocutory proceedings ruled that ACM had correctly established a violation of the Dutch Competition Act.

In January 2018, the municipality passed a resolution in which it designated the commercial exploitation of its own parking garages and parking lots a public-interest activity. This means that, from that moment onwards, the municipality no longer needed to comply with the Dutch Competition Act. That is why ACM has rescinded the order subject to periodic penalty payments. However, the municipality’s resolution does not have any retroactive effect. Therefore, the resolution has no consequences for the establishment that the municipality did indeed violate the Dutch Competition Act in the preceding years. By passing the resolution, the municipality has deemed the use of public funds towards the commercial exploitation of its parking garages to be in the public interest.

Commercial parking providers have the opportunity to file a legal challenge against Veenendaal’s resolution. Should the public-interest resolution not hold up in court, ACM will then be able to reassess whether or not the municipality still competes unfairly with other parking garages. Interested parties also have the opportunity to file an appeal against ACM’s decision to uphold its original decision (in which it established the violation) and to rescind the order subject to periodic penalty payments.

Competitive neutrality

Local governments are allowed to engage in commercial activities. When doing so, they will have to comply with certain rules. These rules protect businesses against unfair competition by the government. ACM enforces compliance with these rules.